This
past Sunday evening, December 1, 2002, I received an email titled “Penny Stock
Promoters Strike Back” from an individual whom I had recently interviewed for
a job opening at Asensio & Company, Inc. The email included a
hyper-link to a site called asensioexposed.com. My immediate reaction
was emotional. I was familiar with the content of the site.
Asensio & Company’s settlement with the AMEX/NASD, Norman Murphy’s
long-ago dismissed lawsuit, the allegations that we buy large positions in the
stock we claim are engaged in fraudulent stock promotions, and other false and
gross misrepresentations concerning Asensio & Company’s business practices
were very familiar to me. They are the well-developed and
highly-publicized fabrications of William A. Carter, the leader of the
criminally-organized stock fraud called Hemispherx Biopharma, Inc. (AMEX: HEB)
and his two long-time attorneys David Franceski and Michael Walsh. These
three men are closely linked and have a 15 year history of viciously attacking
any entity or individual that questions or criticizes Hemispherx.
Despite my familiarity with all of the content and its source, the false,
misleading, libelous and defamatory statements on the site disturbed me.
After briefly scanning the site I sent a hyper-link to attorneys most familiar
with the Hemispherx case, Agus & Partners, P.C. and Goldfein & Hosmer
LLC, and went about my business.

We
are the Wall Street pioneers of private-sector for profit investigation and
reporting of stock fraud. We have been referred to by others as
“indisputably the world’s foremost short seller.” We issued our first
short sell recommendation on a company we considered to be worthless and
entirely devoted to de-frauding investors in 1996. The company was
called Diana Corporation and was listed on the New York Stock Exchange.
It traded at over a $600 million market cap and was being promoted on Wall
Street by the like of Hambrecht & Quist and Neuberger Berman. Our
battle with that company is now part of Wall Street folklore and is included
in our book titled Sold Short: Uncovering Deception in the Markets published
by John Wiley & Sons, Inc. Since then we have investigated and
reported on 28 other companies we believed to be engaged in questionable or
fraudulent stock schemes. All of these companies became very successful
short sells. These have included very large companies, like WorldCom,
Inc., Network Solutions, Inc., Winstar Communications, Inc. and VeriSign, Inc.
and a few penny-stock frauds that were momentarily large enough for us to
trade like the tiny criminally-organized Hemispherx.

In
the past, an unfortunate by-product of our short-selling has been
litigation. We have never paid a penny to settle any lawsuits and have
won all our legal battles. All of the lawsuits were concocted by
promoters seeking to protect their interests. All, except the two
Hemispherx cases, were dismissed or settled before trial. We won by jury
verdicts against Hemispherx in both cases. Our short selling business
has evolved and grown, and is currently free of any litigation. We and
our clients have grown while the over-the-counter stock market’s
extra-ordinary drops have greatly reduced a fraudulent stock promoters’
ability to achieve market valuations and liquidity levels that are
sufficiently large to merit attention.

Shortly after being made aware of the site, and forwarding the link to
two of our attorneys, I decided not to proceed against its owners.
Defamation law is time consuming and expensive. The outcome of any
litigation is uncertain. Even discovering and servicing who is
responsible and getting the web-host and domain name register to eliminate the
site will require time and money best spent on other activities.

After making this decision I have received calls and emails from our
friends and colleagues. All of them are angry and asked of my
plans. Each contact evoked my own first emotional reaction. But
they did not change my opinion. Our reputation remains impeccable.
Asensio Brokerage Services, Inc. is perhaps the only Wall Street firm that has
never received a single customer complaint. Our research has been
extraordinarily profitable. Our book was critically acclaimed (Ludwig von Mises Institute article titled “Stock Market
Scams”). We have been the subject of news
stories and have appeared in public and private broadcast and cable television
news programs, and have been the subject of numerous major front page and
cover news stories in most of the major business periodicals. If there
are members of the investment community or the public at large who care to
learn about Asensio & Company there are far less biased and dubious
sources of information than “asensioexposed.”